Limited Limited Liability Corporation Sole Proprietorship General Partnership Partnership Company (“Corp.”) (“SP”) (“GP”) (“LP”) (“LLC”) C-Corp. B-Corp. S-Corp. Full liability. Joint and individual. General partner: Owner is 100% Each partner is 100% liable Limited liability. responsible for debt responsible for 100% (personal and Liability limited to Limited Liability. Liability obligations. of debt obligations. business assets). the investment in Liability limited to the investment in the corporation. Business and Business and LP: liable to the the LLC. personal assets are at personal assets are at extent invested in risk. risk. the business.

Pass through. Double taxation. Treated as a Pass through. Pass through. Profits pass Profits taxed at the pass-through Profits pass through Profits pass through through to the May choose either corporate level Can choose to be entity.* Tax to the owner to be to the members to be members to be double taxation or and distributions treated as a C- reported in personal reported in personal reported in pass-through status. to shareholder are Corp. or S-Corp. *U.S. Tax Law outlines tax return. tax returns. personal tax taxed as personal eligibility for S- returns. income. corp. status.

1) Execute 1) File Articles of Partnership 1) Begin Operating 1) Execute Organization Agreement 1) File a Certificate of Incorporation Partnership

How to 2) File Certificate Agreement 2) Publication 2) File Certificate 2) Elect Board of Directors Form of Assumed of Limited Name 2) File Certificate of 3) Write Partnership 3) Create Bylaws (if applicable) Assumed Name Operating

Agreement 3) Publication  Strong liability  Strong liability protection protection

 Easy to form  Easy to form  Limited  Ability to offer different types of stock interests  Simple to Pros liability for  Inexpensive to  Inexpensive to manage some partners  Investor friendly, easier to raise capital form form

 Transparent tax  Easier to transfer ownership treatment

 Complicated  Full liability at  Full liability at formation stake stake  Not investor Cons  General  Strict corporate formalities friendly  Hard to manage  Agency partner still with employees relationship faces full liability